NEWS RELEASE

For Immediate Release

2002HSER0033-000455

March 5, 2002

Ministry of Health Services

DOCTORS TO RECEIVE 20.6% INCREASE, ARBITRATION
ENDED

VICTORIA – The government will
give doctors a 20.6 per cent funding increase and has introduced legislation to
end arbitration so it can work with doctors to determine how funds are
allocated, Health Services Minister Colin Hansen announced today.

"This
is an extremely generous settlement, and one that reflects how highly we value
the services doctors provide to patients," Hansen said. "We recognize
that a fair and competitive compensation structure is critical in attracting
and retaining physicians, just as it is for nurses and other health-care
providers. To that end, our government has committed to honour the spirit of
the interim arbitration decision."

Spending on doctors' compensation
in 2002-03 will increase by 20.6 per cent over the amount budgeted for 2001-02.
This is a total increase of $392 million for the coming fiscal year, an average
of $50,000 for each of the 7,800 doctors currently practising in B.C., and includes:

§$185 million in new funding for fee-for-service
billings for 2002-03, an 11.6 per cent compounded increase. This new funding is
based on a retroactive increase of 6.2 per cent on billings from April 2001 to
November 2001, and a further 5.1 per cent increase on billings for the period
to April 2002.

§$80 million in new funding for on-call services as part
of a new provincewide program that will be worked out together by the
government and the B.C. Medical Association. This is an increase of 174 per cent
from current on-call funding.

§$127 million in new funding for alternative methods of
payment, rural incentives, volume increases and other increases for the
redesign of the medical system. The government will also extend the 6.2 per
cent and 5.1 per cent retroactive payments in 2001-02 to doctors who are paid
through salaries, service contracts and sessional payments.

With these increases, B.C.'s per capita expenditures
on doctors will increase to $602 in 2001-02, 21 per cent higher than what
second-place Ontario spends, and 34 per cent higher than Alberta.

Hansen emphasized that while these
increases honour the spirit of the arbitrator's decision, further increases
signalled by the arbitrator are not sustainable. Therefore, Bill 9, the medical services arbitration act, repeals
the Feb. 8 interim arbitration decision. It also removes clauses from three
agreements between the province and the BCMA that allow for continued binding
interest arbitration to settle outstanding compensation issues. All other provisions
of these agreements, including those allowing for arbitration to interpret
rights already settled, remain in effect.

"Our government is facing a
$4.4-billion structural deficit," Hansen said. "We have increased
total health spending by almost 20 per cent in the last two budget years alone,
to $10.4 billion, yet cost pressures continue to grow. Clearly, these increases
in health spending are not sustainable over the long term. Unfortunately, parts
of the arbitrator's decision would make these structural problems even worse
and do not allow us to direct health dollars where they are needed for
patients."

For example, the interim decision
increased funding for on-call service but signalled an on-call rate structure
that provides incentives for solo or small practices that may lead to doctor
burnout and gaps in service. The decision also made no provision for
alternatives to traditional fee-for-service payments, such as service contracts
or salaried payments, which many physicians, particularly new doctors, have
requested.

Moreover, the interim decision
binds government and doctors to continued arbitration in the future on a
variety of other matters, creating the potential for even more cost increases
that taxpayers cannot afford.

Hansen said government will meet
with physicians and health authorities as soon as possible to discuss how the
new funding will help doctors meet government's goal of providing British
Columbians with the right health services, when and where they need them.

"Doctors have clearly told us
that structural reforms are urgently needed, to save and renew our public
health care system, and make it work for patients," Hansen said. "The 20.6 per cent increase we have
committed to doctors will allow us to begin to make those needed changes, while
protecting taxpayers from the risk of further cost increases that are not
sustainable.

"Doctors are an integral part
of our health system, and we need to work together to renew health services so
they work better for physicians and patients alike.

Further information, including a
letter from Hansen to B.C. doctors, is available on the Ministry of Health
Services Web site at www.gov.bc.ca/healthservices.